Cablevision shares up after analyst sees subs rise
NEW YORK, Jan 29 (Reuters) - Cablevision Systems Corp shares (CVC.N) rose more than 8 percent on Tuesday after an analyst forecast it would add subscribers in the fourth quarter and said the competitive challenge by phone company Verizon Communications Inc (VZ.N) may have been overestimated.
Richard Greenfield, an analyst at Pali Research, said Cablevision's outlook for a flat year-over-year subscriber growth could imply basic subscriber additions in its upcoming fourth quarter, but investors are expecting a decline.
Greenfield now expects Cablevision to add 500 subscribers in the quarter compared with his previous forecast of a loss of 7,000 subscribers.
"We believe Cablevision's positive Q4 basic sub additions are all the more impressive given the declines we expect at both Comcast (CMCSA.O) and Time Warner Cable (TWC.N)," Greenfield said in a note to investors.
Verizon is rolling out its FiOS advanced digital TV and high-speed Internet service in Cablevision's New York metropolitan area.
On Monday, Verizon said it added 226,000 FiOS TV customers in the fourth quarter. It now has 1 million FiOS TV customers in total.
But Greenfield said that, based on Verizon's numbers, he now expects the telephone company's roll-out of FiOS TV to slow down.
Cablevision's stock has tumbled nearly 40 percent since October when the most recent attempt by the Dolan family, which has the controlling stake, to take the company private failed. The stock has also been hit by fears of the economic downturn and impact of competition from Verizon and satellite TV operators.
Greenfield said the Dolans should buy back shares given the low stock price and/or issue a special dividend. But he said this was unlikely as the Dolans would probably try and take the company private again.
"We believe the Dolans may be reticent to aggressively repurchase Cablevision shares in the open market, in hopes of making yet another attempt to privatize Cablevision," said Greenfield.
Cablevision declined to comment.
Cablevision shares rose $1.83 to close at $23.53, while Verizon added 60 cents to $38.71. Comcast added 27 cents to $17.96, while Time Warner Cable was up 10 cents at $25.03 at the close. (Reporting by Yinka Adegoke; Editing by Andre Grenon)
